U.S. to continue helicopter purchase even if only 1 bidder

By Andrea Shalal-Esa

Published January 04, 2013

Reuters

WASHINGTON – The U.S. Air Force on Friday declined to confirm that it had received only one bid for a $6.8 billion helicopter competition, but said it had procedures in place that would allow the acquisition to continue regardless of the number of bidders.

All but one of the contractors expected to bid to build a new combat search and rescue helicopter for the Air Force announced last month that they would not compete, raising the prospect that the Air Force would have to adopt a different approach to the acquisition program.

Sikorsky Aircraft, a unit of United Technologies Corp , did submit a bid for the competition, based on its H-60 helicopter, according to a company spokesman. Other potential competitors confirmed that they had decided to skip the bidding, and at least one of the companies said it was exploring a possible legal challenge to the terms of the competition.

Air Force spokesman Ed Gulick said he could not say how many companies had submitted bids by the Thursday deadline, but the Air Force had "acquisition procedures in place to proceed with this important acquisition regardless of the number of bidders."

"We cannot release as the information is source selection sensitive," he told Reuters in an emailed statement.

Gulick said the Air Force remained "committed to a fair, open and transparent process" to pick a new, affordable Combat Rescue Helicopter (CRH) that met the military's requirements.

"To ensure this occurs, we are prohibited from releasing information while in the request for proposal and selection processes. Once we select and announce the final contractor we will be able to openly discuss the details of the CRH program," he said in an emailed statement.

Lieutenant General Charles Davis, the top military official in charge of Air Force acquisition, told Reuters in an interview last month that the helicopter competition was structured to tell potential bidders exactly what capabilities the Air Force wanted and what it could afford.

He denied that the terms of the competition had been written to favor the Black Hawk helicopter built by Sikorsky, and said Sikorsky would be asked to submit certified cost and pricing data if it turned out to be the sole bidder for the program.

A Sikorsky spokesman said the company was aware that it could be asked to provide such data if no other bids came in. Lockheed Martin Corp is a key subcontractor on the Sikorsky bid.

Boeing Co , Bell Helicopter, a unit of Textron Inc , EADS and Northrop Grumman Corp teamed with AgustaWestland, a unit of Italy's Finmeccanica SpA , announced last month that they would not bid for the work.

At the time, industry executives said the bidding rules were so narrowly framed that they effectively excluded all but Sikorsky's Black Hawk helicopter from the competition, and would not reward extra capability offered by other aircraft.

Davis last month said that the Air Force had already drawn up plans for how to handle the procurement if only one company submitted a bid, although he said the service would have preferred to have a competitive process with more bidders.

He said the Air Force's move away from more "nebulous" and "open-ended" procurements was positive for the industry, allowing companies to make more informed decisions about whether to spend money preparing a bid for a given competition.

He said the change toward more narrowly defined requirements for military equipment was a result of multiple protests filed by companies in recent years that challenged the more open and subjective way procurements were structured in the past.

Boeing won the Air Force's last rescue helicopter competition with its H-47 helicopter, only to see the $15 billion contract canceled after several protests by losing bidders.

"This is clearly a result of all of the issues that have accumulated over the years of all of these high-visibility protests," Davis said. As a result, the Air Force was now being more diligent in the structuring of its acquisition programs.

"The bottom line is this is a good-news story," he told Reuters in December.